As the US-Iran war intensified in March 2025, Glencore Plc made a request to its board for a temporary suspension of its trading risk limits. The company's value at risk (VaR) surged to $456 million, significantly exceeding its usual $200 million cap. This surge in risk was a direct result of the heightened volatility in the markets triggered by the conflict.
Glencore capitalized on the increased risk allowance to take advantage of the disarray in the energy market. The first half of 2025 proved to be one of the most profitable periods for the company's energy trading business, with earnings reaching $3.3 billion. This amount surpassed the entire year's earnings in 2025 and was second only to the first half of 2022, when Russia’s invasion of Ukraine caused a similar surge in global energy prices.
The conflict's impact was felt in February 2025 when the Strait of Hormuz was effectively closed, trapping large quantities of oil and products within the Persian Gulf. This move sent crude prices soaring, creating significant trading opportunities that Glencore took full advantage of. The closure of the vital shipping route disrupted global energy supplies, leading to a spike in prices.
By late May, when the initial wave of market volatility subsided, Glencore no longer required the expanded risk limit. The company attributed the higher VaR to the turbulent market conditions rather than any change in its risk management strategy. As the market stabilized, the company's risk levels returned to more typical levels.
Steven Kalmin, Glencore’s Chief Financial Officer, emphasized the company's cautious approach to betting on oil price movements. He noted that Glencore's positions were always conservative, ensuring that the company did not take on unnecessary risks. By the end of June, the company's VaR had decreased to $48 million. The firm's performance in 2025 echoed its achievements in 2022, when the Ukraine invasion triggered a global energy crisis and similar trading profits.
The events of 2025 underscored Glencore's ability to adapt to extreme market conditions. The company's strategic response to the US-Iran conflict and the resulting energy market disruptions highlighted its readiness to capitalize on volatility while maintaining a disciplined approach to risk management.